tv Best of Bloomberg Technology Bloomberg November 19, 2016 11:00am-12:01pm EST
emily: i'm emily chang and this is "best of bloomberg technology." we bring you all of our top interviews from the week in tech. coming up, facebook in the eye of a post-election storm. c.e.o. mark zuckerberg strikes back at critics who say the social media site swayed the presidential race. plus snap is filing to go public.
sources say what may be the biggest i.p.o. in recent years could come as early as march. first to our lead. snapchat begins the process of going public. its parent company snap has filed for an i.p.o. under the jobs act. this is something a company can do if it makes less than $1 billion in annual revenue. its i.p.o. would be the biggest of a social media company since twitter sold shares back in november 2013. our editor at large cory johnson caught up with bloomberg's social media reporter and y combinator partner after the news broke. >> snapchat is filing confidentially because it doesn't have a billion dollars revenue yet. it can do that within the law. this i.p.o. could happen as soon it is a first quarter of this year, maybe as early as march. it could be up to $4 billion in what they raise. this is really incredible considering they filed to go
public before the election. everything still seems pretty much on track. cory: fairly amazing here that if we're talking about a $25 billion i.p.o., facebook went out and collapsed afterwards. this is very aggressive pricing. >> this is absolutely aggressive. what they are going to try to emphasize is their growth potential. snapchat is very early on their path for revenue and they already have 1/3 of facebook's users in the u.s. they are definitely not making as much money off every user as twitter or facebook do. twitter has fewer active viewers. they are expected to have $2.55 billion this year according to estimates. snapchat will probably have about $350 million, which is definitely a fraction. their point is definitely going to be to emphasize growth. cory: justin, let me ask you, you had the tiger by the tail in a business that grew so fast. it had so many users and such
revenue, not unlike snapchat. what is your take on a company that has decided to go public with the backing they have had? justin: snapchat has a tremendous network effect. they have people using it many times today and i don't think that's likely to change and i think it is likely to grow as more people spend more time on mobile around the world. the long-term prospects are extremely strong. cory: what do you think about the i.p.o. as the way for a company to get out and decide to grow the next step? justin: it makes sense. an i.p.o. is a necessary part of your evolution as a tech company. it's the next step to get liquidity for early investors, to get liquidity for early employees, i think it's all part of the process. the price is pretty high, but i think we'll see in the long-term these tech companies have a strong network effect will be extremely valuable. people think facebook is super valuable right now but they only have 1.7 billion people and billions more that will eventually join facebook. cory: i have a chart that shows the i.p.o. business but the
i.p.o. business -- we'll get to that in a minute, but the i.p.o. business itself has been very quiet. if you look at this chart, the numbers we are talking about, how many i.p.o.s happen in recent years. really low numbers for 2016. this is a dollar basis. if you go here, you see the benefits from facebook, but fundamentally, 2016 is an enormously quiet year. why is that? sarah: there have been many factors why we haven't seen as many ideas as we expected. one thing we keep hearing over and over is that 2017 is the year we might see snapchat, uber, dropbox and airbnb get more serious about going public but capital has been extremely easy to get in recent years and
it looks like that may have peaked around 2015 and now companies may have to look for other sources of capital as vc's and later stage investors want a return on investment and are getting skeptical about growth prospects. cory: i can't wait to see what the numbers really look like. see the spin that will be a part of that. sarah: anyone who wants to link it to us. cory: bloomberg is here to help. staying on social media, google and facebook have announced some actions to stop users from posting fake stories and deriving revenue after chris pointed fingers at these stories may have influenced the u.s. presidential election. sarah, let me start with you. this is a story that has exploded in recent days after the election of donald trump for president. to me, the strongest thing about this was the story on buzzfeed about the macedonian bloggers putting up fake stories to generate clicks to get paid.
sarah: this is an extremely lucrative business if you can figure out a way to play it. the outrage sells. clicks are easy to get on these platforms and facebook for its part needs to take a close look and is taking a close look at its responsibility for distributing information. fake news is one thing and that might be easy to quash but what might be more difficult to address is these more biased stories that give you some of the facts and maybe create a misleading perception. they are not necessarily fake are definitely more propaganda like in their nature. cory: you saw the fake story of a pending hillary clinton indictment and trumped up -- pun intended -- by fox news. they actually ran with that story which wasn't real. facebook's founder, mark zuckerberg says only 1% of the stuff up there was fake.
justin: i think that is completely wrong. cory: you think that is fake? justin: i think that is not accurate. it started on a viral site that was newly registered. that story was shared 216,000 times on facebook whereas the "new york times" story that was true that said hillary clinton, the f.b.i. was clearing her of all charges was only shared 80,000 times. the impact of some of these fake stories can be huge and i think it is facebook's obligation and ethical responsibility to not help spread fake news. cory: did facebook make money on the spreading of fake news? and at what level do you think that happened? justin: i don't think they are profiting off of it specifically but it is optimized for engagement. that means people click on what they want to see and people click on what confirms their
biases. facebook has optimize their algorithm to show people what they want to see and oftentimes that does not correlate 100% with what is true. cory: it sounds like they did make lots of money on these clicks. they might not have done it intentionally, but their business model was set up in such a way that they were a great beneficiary of all these clicks on all of these fake, inflammatory stories. it had people confirming their own biases. justin: that's right. when people are engaged, when they click on something, when they like something, whether it is true or not, they spend more of their time and attention on facebook, so they are benefiting from it. emily: meantime 13 filings rolled out this week giving us a glimpse of what tech stocks are hot or not according to biggest institutional investors. shares of twitter rose after the hedge funds added stakes in the company. on the other hand investors are divided on the outlook for alibaba. one of its early investors
paired its stake on the ecommerce giant. tiger global management added more shares. also notable from tiger, was its decision to cut amazon and double down on apple. coming up, shareholders voted on the tesla solarcity tie-up thursday handing elon musk his fate on the bold idea. we'll have all the details next. plus we'll hear from joe lonsdale. will his company go public in the age of trump? this is bloomberg. ♪
the new rule could prevent about 2400 pedestrian injuries a year. speaking of electric cars, tesla shareholders approved the solar city merger this week by an 85% vote. we caught up with david welch of bloomberg news in manager to and a research analyst for all the details. >> what elon wants to do is put all of this stuff under one roof so you can buy your model 3, assuming they get that out on time and you can get a solar roof and you can have a battery system so the sun's rays charge your battery and it can charge your car. it is a one-stop shop. the synergy is there. it is not clear why these companies need to be together other than it is elon musk's vision. you're not going a lot of
production over the batteries in the auto plant or the solar panels for that matter. it is not that kind of synergy. for solarcity, the synergy of the tesla brand carries so much weight. they have almost 400,000 people that put money down to get a model 3. when you put stuff under the tesla name, that could really generate revenue and that is what elon is really pushing with this. emily: ben, what do you think the impact will be of a trump presidency on elon musk's big vision? this is a president-elect who may not believe that climate change even exists. that may translate into his support or lack thereof for clean tech. >> just one point on the acquisition, it is important to note one of the things that were just about solarcity was the buffalo manufacturing plant, it was good to see. i think having tesla has under tesla's umbrella helps.
as far as the political climate, the political climate across many sectors is facing a lot of uncertainty. i think trump and his staff has been clear that they are not going to be supportive of climate change. the investment tax credits that drive one of the drivers of solar in the united states was shepherded in by paul ryan. it is a jobs creator. i do not think they are going to go after tax credits. there are -- it is still a risk and it is something that people are talking about. the vision is to get down to a cost that is competitive without tax credits. there are companies on the verge of that. we have a difficult solar environment right now. because of oversupply particularly because of ramping
up too much capacity in the short-term the medium-term solarcity benefits from that because they are buying up panels and we're seeing prices drop dramatically -- that will help their costs and help with adoption. emily: what are the new products that tesla and solarcity will offer? >> you are going to see a solar roof. these are not just panels you install on top of a house. these are actually architectural roofs and look pretty good. it is a total one-piece unit that is the entire roof of a house. that will be key for solar city. for tesla, the big thing is obviously the model 3 which is going to come out in about 18 months. the vehicle has to go off without a hitch to generate cash to keep the enterprise going. after that, elon has talked about a delivery truck, pickup truck being electric. my guess is that we will see the pickup truck first.
you will see the fleet of vehicles coming out over the next several years. emily: the business of running a stock exchange has changed quite a bit. fees are up, listings down, and disclosure requirements are easier than they have been in years. after that, a changing of the guard at the top of one of the biggest operators in the u.s. bloomberg's betty liu talked with adena freeman on the exchange. adena: i've been working with bob now for 10 years and when i came back as president and coo, he and i have been partnered together to make sure we are optimizing the business. i feel like i have my handprints on the vast majority of what we have been driving toward and focused on. my job is to continue the journey to make sure we continue to be a critical market for an infrastructure provider. and technology provider to the
capital market. betty: bob has been very focused on technology and expanding those capabilities at the nasdaq. will that be a major focus going forward for you? adena: technology is deeply embedded in our dna. it's how we got started to be the first electronic exchange. that will continue to be our focus and how we can bring emerging technologies to interact with the capital markets as efficiently and effectively as possible. that's coupled of course with great client service and all the other things that come with being a world-class exchange. betty: is there anything different you might do, anything you might expect to see out of the nasdaq? adena: we have been transforming nasdaq into a global market
technology provider and i expect i will continue to take that journey with the clients and employees as we continue to be an exchange operator. betty: let's talk a little about regulations. now there is a lot of uncertainty around policies in general. we were just hearing president obama talking about what may or may not be expected. what he is responsible for or not anymore. there's a lot of talk as we heard from president-elect trump about rolling back regulations that have been imposed on the financial world. how's that going to affect the nasdaq? how are you preparing for that? adena: to the extent we do have a republican administration and they show a pro-business orientation, that does tend to come with what i will call balance in regulation. one area that has impacted our industry has been dodd-frank and while there are a lot of good safeguards that have been put in
place coming from dodd-frank, there has been unintended consequences. most notably banks are no longer in a position to offer much-needed liquidity in some of the markets where we operate. we would like to see the opportunity for dodd-frank to be modified for banks to take responsible risk taking to provide that really important liquidity. betty: modified or retracted? what would you prefer? adena: we have to recognize an enormous amount of work went into the creation of dodd-frank and there's a lot of reasons for it. we recognize the history we come from but we know whenever you put in new regulation, there are unintended consequences that come with it. how can we make sure we are modifying the regulation to make sure it is having the impact you wanted to have? betty: would you say
president-elect trump is good for the exchange? is good for the financial market? adena: from a we have seen so far, which is only one weekend, a republican administration with a pro-business orientation is good for the financial industry. betty: he has pledged to cut back on corporate taxes. corporate taxes. how big an effect is that going to have? adena: if you have some of the tax policies they are considering, they repeat ration tax, holidays and other things that make it so companies can optimize the cash they are generating and reinvesting in the business appropriately and reinvesting in growth, that is good for the economy. emily: that was our own betty liu with adena freeman who takes the helm at the nasdaq in january. coming up, could uber get the last laugh in china? tighter regulations on ride sharing could make didi's business a lot tougher. we'll head to hong kong next. check us out at bloomberg tech tv weekdays at 6:00 p.m. in new york and 3:00 p.m. in san francisco. this is bloomberg. ♪
emily: samsung is making moves in the automotive technology business. the company has agreed to buy harman international industries for $8 billion in cash. harman makes high-end car audio sand a leader in car technology. their c.e.o. says samsung is a good fit. >> samsung and harman believe this is an ideal strategic fit that will maximize our complementary strengths. their global scale and r & d capabilities and distribution channels will provide harman the resources to be able to expand our reach. emily: sticking with the car business, it has only been a few
months since ride sharing giant didi bought out uber's operations in china. they are going to endorse tighter ride sharing rules. if that policy goes into effect, uber's deal might give -- a last laugh. cory johnson spoke with david kirkpatrick. take a listen. >> there is a discordance between the central government and the local administrations. if you look talent central government, they have legalized these car hailing apps. if you look at the local level because the city governments are in charge of issuing permits for taxing and operations, this is probably a pushback from the b.c.a. drives and the companies behind them where they actually take a cut from the operating revenues so for didi coming in and bringing millions more
drives, it is a blow to their business and that's probably where we're seeing some of this pushback from. cory: they were taking a step closer to an i.p.o. i wonder if you get the sense with not just uber but some of these unicorn companies are starting to think about cashing out their investors, growing up a little bit and becoming publicly traded companies. >> i think in general that may be happening. i don't sense it as much at uber as some of the other companies. i think uber is feeling comfortable being able to raise capital at these astronomical private valuations. if you look at facebook's situation, if they had never gone public, they would be able to do a lot of things to respond to situations that are putting them in a difficult position now that they cannot do when they have to keep turning the advertising crank to please wall street. i can see them being sympathetic
to not going public. emily: china web giant tencent reported earnings this week. profit missed but revenue beat and that's thanks to three parts of the business. smart phone gains, performance-based ads plus payment and cloud services. peter elstrom covers the company for bloomberg news and joins us from our tokyo bureau. peter: it is a pretty interesting quarter. the company boost their revenues by more than 50%. by almost any standards, that would be considered a very strong growth. it is investing in they see ventures and that's why you saw net income rise under slowly than that. the company is the dominant player in messaging services through chat and qq. it is investing into cloud services and games and online paying systems too. it has a bunch of new initiatives it is trying to invest in and expand its revenue from here. also get out ahead of a slowing
chinese economy. emily: they have been essential to tencent's growth. what are some of the trends we're seeing there? any signs of slowing growth? peter: well, just for context, chat had about 840 million users. about twice many as twitter. it is the most popular messaging service within china. they also have the qq messaging services. growth is slowing a bit because they have now been adopted by almost the whole adult population. they are selling more advertising through those mediums as they offer new services and are also marketing games and other kinds of good through them. they are very, very popular services and tencent is trying to take advantage of this. emily: still ahead, twitter suspends the account of a prominent white supremacist. as it attends to curb abuse and harassment. this is bloomberg.
emily: welcome back to "best of bloomberg technology". i'm emily chang. fallout from the election of donald trump continues to ripple through the tech world, especially when it comes to social media companies. this week twitter announced it suspended the account of prominent white supremacist. among them richard spencer. who is credited for spearheading the all-white movement that supported president elect trump. twitter also added tools this week to help users better filter out abuse. in a statement the company said because twitter happens in public and in realtime, we have had some challenges keeping up
with and curbing abusive conduct. we took step back to reset and take a new approach and find and focus on the most critical needs and rapidly improve. meantime, facebook continues to come under fire for allowing fake news to spread in the run-up to the election. c.e.o. mark zuckerberg has dismissed those claims. we caught up with venture capitalist jennifer fonstad, co-founder of aspect ventures and sarah frier, who covers social media for bloomberg television. >> twitter has, in the run-up to the election understood that there has been a dramatic increase in hateful conduct on their site. their anti-defamation league has run studies. there has been an increase in white supremacists, anti-semitic. those kind of commentaries. emily: as a result of donald trump? >> held up by the excitement over the election. not necessarily endorsed by trump but definitely they have found a way to rally around the election. and so the company was already
working on tools to current harassment in light of that, and i think that the news they released earlier this week about some of the more stringent rules are going to be in place, better reporting tools people will have, and now they are showing they can actually take action. this is something they have come under fire for in the past and in light of the election, they really need to take a serious look at it. for facebook there is fake news. there is a fake news on twitter too, but on twitter people are much more concerned about the amount of harassment and abuse. emily: facebook and twitter have been criticized for amplifying the voices that people wanted to hear. let's take a listen to what mark zuckerberg had to say about fake news and whether or not it influenced the election. take a listen. >> personally, i think the idea that fake news on facebook -- it is a very small amount of the content, influenced the election
in any way is a pretty crazy idea. emily: jennifer, what do you think? how much responsibility does facebook, twitter bear here? >> the election has highlighted and amplified how impactful social media is. whether it is twitter or facebook. i think all of these private organizations -- they aren't subject to first amendment coverage, common carrier rules. but how they think about their impact requires them to reflect on what that looks like. even if it's a small percentage of that today, how this will change over time and what tools they can use on a nonarbitrary basis, manage fake news or harassment or aggression through their sites is something they need to be taking a look at and i suspect they are. emily: twitter and facebook are completely different sizes. facebook is enormous. david kirkpatrick wrote the book on facebook and suggested
earlier this week that jack dorsey is taking a more political stance. where we are seeing mark zuckerberg be much more apolitical. >> zuckerberg, it's important to him personally to appear unbiased. we saw how facebook reacted to the dispute earlier this year around trending topics, when gizmoto reported that there may gizmodo reported that there may be liberal biases in the stories they selected to be trending. facebook almost overreacted to that. they fired the human editors, they invited conservatives to headquarters to speak with zuckerberg and learn more about how newsfeed works. this is a very tricky place for zuckerberg to be in. he does not want to be the arbiter of truth. he doesn't even want to block biased opinion mongering news, opinion masquerading as news. those will be the most difficult articles for facebook to try to
restrict. fake news could be easy. those kind of things that are trying to persuade people are going to be a lot harder. emily: do you think facebook needs to take greater responsibility to add more human editors, human curators of news, like yahoo! news did back in the day? >> i think facebook has never characterized themselves as a news site. it never characterized itself as a promulgator of news. putting that responsibility on them from a human editing perspective raises their liability. emily: but the reality is so many other users are seeing their news through facebook. >> i think that is fair and the type of information that is shared. there may be some automated tool solutions, and don't forget the power of users themselves, to be able to self manage and self regulate. there is quite a lot of that already today. zuckerberg could put more tools in place to enable the individuals to manage that as well. >> if people are only clicking on stories they agree with, maybe they won't understand what's fake or maybe they have been lacking their own tools to discover what news is or isn't, to be believed.
>> that's a challenge. that's a challenge even before facebook came along. people often choose to hear information they want to hear. they choose fox news over cnn in the same fashion. so how much of that responsibility falls back to zuckerberg and facebook versus the individual and consumer, and the education system we try to foster acceptance of different voices. emily: sheryl sandberg did publicly endorse hillary clinton in this particular election. let's talk about snapchat. we have reported that they have filed to go public, they filed to go public before the election. is snapchat facing any of these allegations are they in a different place because the content is so ephemeral? sarah: snapchat is not fee-based. it's not even one of those situations where you are sorting through who to follow. they show you what to look at, they have their discover channel
that has media partners creating content. they have live stories that have covered rallies from clinton and trump. both candidates advertised on the platform. snapchat's really not been affected by this as much. it is more ephemeral content that people are sending to each other. internally, i don't think snapchat executives, even though they filed to go public before the election, i don't think they are worried about a trump presidency. everything seems to be on track over there. emily: jennifer, you were just awarded vc of the year by deloitte. i'm curious how you are looking at investing in social media right now. you started a new fund a few years ago. given now the power of facebook and twitter and snapchat, do you see social media as -- is there really room for growth there? >> continues to be amazing
innovation. i think a lot of innovation is driving toward the conversational interface. most of the innovation we're seeing in investing is moving towards where the consumers are spending their time, which is on facebook -- facebook messenger, i messenger. where we see the opportunity for more applications will be driven off the ceiling on top of that platform. emily: billionaire and twitter investor prince alwaleed spoke to bloomberg from riyadh this week. he weighed in on the state of his various investments. he remains optimistic for the future of the site under the c.e.o. >> jack dorsey, my friend, just took over a year ago. he established many initiatives.
related to sports, nfl and otherwise. i think this have to begin sometime. i'm optimistic. we still believe that the best days are to come. emily: still ahead, joe lonsdale joins us and how a trump presidency may impact tech. plus jim chanos chimes in on president elect trump's impact on tech stocks. this is bloomberg. ♪
reliance on oil. erik schatzker sat down with joe lonsdale, co-founder of palantir technologies. the question, what will peter thiel bring to president elect donald trump's transition team? >> he is one of the smartest people i know. what is unique about him is he is able to look at things from a contrary in perspective. the way he maps out the world is not the way people in the media talk about what matters. having peter there will give him a perspective. erik: what do you think his priorities will be? joe: i'm not sure what his priorities will be. i think he has a lot of common sense around things that matter for the tech sector. a lot of the regulatory reform. i think peter really believes in making america a place where you are continuing to advance and build new things and think about the future. he talks about how the 1960's were looking to the future and we don't have that anymore and i think he's going to try to figure how to put that back into place. >> do you think his role ensures a positive or at least an accommodative environment for
technology and maybe even silicon valley more specifically? joe: i don't think you can say anything for sure. it gives me a lot of comfort that it's going to be good for up-and-coming businesses. for established businesses, i don't know if he can protect them or not. we're going to see what happens with that. erik: given the kind of work palantir has done for the u.s. government, what kind of restriction does it face in saudi arabia? or the gulf more broadly? joe: i think the restrictions on palantir and i can only speak is a cofounder, not someone running
it -- the u.s. government has encouraged palantir to work with other countries and go after terrorism is one of the things that they do. appropriate use of data and civil liberties. there's a lot of governments that want to help work with the u.s. and do that job but obviously, they are not going to want to report regimes doing things against our own civil libertarian values. >> so they are self-imposed. >> there are other positions like you can't work with certain parts of china or iran, but i think a lot of the world has become more self-imposed in terms of what silicon valley wants to help with. erik: one of the curious things about palantir is that it remains private. if not mistaken, your cofounder remains ceo of the company and said running a company like this would be difficult if it were public. do you think that is still the case? joe: i think a lot of these founders are very bright people that i learn a lot from an overestimate how hard it is to be public.
a lot of people are very scared of becoming public and a lot of people who have made the transition, it's not as bad as people think. erik: do you think the time will come when palantir can go public? joe: i definitely believe so. erik: how long do you think it will take? joe: as an early shareholder, i would like to see it earlier and i understand why other people might want to delay it. erik: of all the trends in technology today, whether it is a big data, machine learning, ai , or a tournament cars, or anything else for that matter because the list goes on, what , excites you the most? joe: what excites me is how the big industries are going to change over the next 10 or 20 years. when you talk about ai, those are tools that we use. just like to cloud is a tool we use. the fundamental truth is data is not being used to run these ministries in the way that it could be. there are platforms being put in place to harness data that for the first time is input into health parts of health care are being run it will make those industries work in a better way.
i'm excited about fixing big industries and using technology to run them. erik: one of the questions you must get all the time is what happens to the jobs? how do you answer that? joe: that is another great question. i think jobs are not as much of a zero sum thing as you think. if we're going to get rid of the manufacturing jobs, that means we have a world where everything you could buy is extrordinarily cheap. the cost of everything we buy goes down by 98%. there are services jobs, entertainment and other things people could do to create wealth, so i think it is a golden age if we can all afford things cheaply. it is not nearly as scary as people say. erik: how do you capitalize on that as an investor? joe: i think the shift that is going on is the platforms that are put in place that are going to run the big industries. don't figure out what those platforms are and invest in this platform companies. emily: still to come, a powerful protection over a consumer internet access could be on the chopping block under the trump administration.
emily: a story we are watching. microsoft has offered concessions to european union regulators trying smooth the way for the acquisition of linkedin. they started casting an eye over the megamerger in october. investigating the business activities of the two firms to determine whether the merger could be bad for competition. microsoft announced the $26.2 billion deal in june. tech stocks were hit hard by president elect trump's surprise win. though they have crept back light slightly in recent days, many are questioning what a trump presidency will mean for technology, specifically facebook, amazon, netflix and google. they asked what president elect trump means for big cap u.s. techs.
take a listen. >> i think there is some basic narrative about technology and silicon valley being out of favor just as middle america goes in favor. again, who knows? it is too early to tell. >> prior to this election, i mean, the recent moves aside, did what we see in these big tech stocks look bubbly like investors were sort of casting aside rationalism about evaluations? >> we're stuck, guys. there are certain things we think are overvalued and the business model is questionable and others are borderline cheap. >> which ones are cheap? >> i'm not going to disclose specifically. but the point being is that i think everything is moving together right now thematically.
i think over time that is going to dissipate and the companies are going to be judged on their own merits. take a look at something as simple as net neutrality which the obama administration embraced and hamstrung the telecom companies. to the positive of the internet companies. he has in the past talked about that not being fair to the telecom companies. companies that have benefited from net neutrality have gotten hit pretty hard. but will he enact anything? we don't know. >> what do you think about what a president donald trump would mean for big deals that are still pending such as at&t and its effort to buy time warner? >> i think there will be fewer business combinations. they tend not to happen in those time periods. he sort of indicated some skepticism on a couple of big deals. emily: that was jim chanos. net neutrality is considered by
many to be the obama administration's signature policy on tech. remember this is the idea, internet service providers like at&t and verizon cannot create fast and slow lanes for web traffic putting companies like netflix at their mercy. the f.c.c. passed rules prohibiting this but the election of trump has many concerned net neutrality could end up on the chopping block come 2017. he didn't have a clear policy on the issue, trump once tweeted obama's attack on the internet is another top down power grab. net neutrality is the fairness doctrine. we were joined by larry downs is the tech freedom president for a roundtable discussion. >> i don't think that's what is going to happen. that tweet you mentioned was in response to president obama's announcement he wanted to the
f.c.c. to turn turn isp's into public utilities. i think the net neutrality rules themselves are not all that controversial. neither congress or the f.c.c. may move them back to the federal trade commission. i don't think they are going anywhere. emily: that means you think it will remain basically business as usual. no fast and slow lanes? >> business as usual for net neutrality but not for reclassification of i.s.p.'s. that, i think we'll go. emily: what will it mean for netflix? netflix? >> it won't change anything or for consumers. none of these rules were being violated because the f.t.c. was already on the job enforcing them. emily: our bloomberg intelligence analysts have outlined three possible ways that the policy could change. one through the courts, you know, we're expecting trump to appoint another supreme court justice. through congress, limiting the ability or the new trump appointed chair of the f.c.c.
they would change the rules themselves. what do you think is the most likely path forward? >> i think you can count on the new f.c.c. chairman to start undoing the legal claims of authority that underlay the two open internet orders we have seen. once that happens, i think that will kick the issue back by default to the federal trade commission. which as larry said, they could have addressed this issue starting 10 years ago and that really forces the democrats to decide do they want to take the deal that the republicans offered them last year? if they do, they may succeed in getting some version of the issue back to the federal communications commission or they may get the federal trade commission to have rule-making power. but i think larry is basically right. you're not going to see this issue change fundamentally. the 2010 rules were never really controversial at their core and the industry if they would sign
up today to a self-regulatory pledge to be enforced by the federal trade commission. emily: larry, there has been debate by the authority of the f.c.c. over net neutrality or some other issues. do you think that will be questioned? >> i think so. the question has been in 1996 did congress give the f.c.c. authority over broadband? that is what we have been fighting about for the last 10 years. it is not really clear. congress may step in and make it more clear. that was part of the bill that barron mentioned. the f.c.c. may reinterpret it themselves and say we're going back to the version we had all along up until chairman wheeler.
that will definitely be a keystone of what they will do to re-examine their own authority and decide what did congress really mean and what really is our limit? emily: what about when it comes to m&a? trump indicated he was not a fan of the at&t-time warner measure. what he believes no one really knows. it has been confusing. there is other analysis that he could be good for m&a. that a sprint and t mobile could merge in this area if they wanted to. how do you think the f.c.c., a trump f.c.c. will weigh in on m&a issues? >> there is really no way to tell. we have to wait to see who becomes chairman and who takes over anti-trust at the department of justice. but the people who actually follow these things are in general skeptical of the need for government intervention and are generally more willing to let deals go through and if there are issues, real demonstrated harms to consumers, to come up with conditions that will respond to those instead of blocking deals or using conditions just to regulate without going through the normal process as the obama administration has done. so i think probably we'll see
deals more likely to go through but it depends and if you saw a wild card chairman come in that might follow through on what trump has tweeted about maybe things would be different but there is no way to tell at this point. emily: silicon valley is in an interesting position having been so outspoken against donald trump. how do you see the relationship between trump and the tech industry playing out? do you think trump risks alienating them further? to their detriment perhaps. >> i think what we can hope for is that republicans are free trade. silicon valley likes things to be left unregulated and hopefully those things will align and those character
differences will work themselves out. emily: that does it for this edition of "best of bloomberg technology." we will bring you all the latest in tech throughout the week as president elect donald trump's election continues to ripple through the tech world. tune in 6:00 p.m. eastern, 3:00 p.m. pacific. we'll see you then. this is bloomberg. ♪
♪ david: coming up on "bloomberg best," the stories that shape the week in business around the world. bonds start the week with a sell-off. hopes rise for an opec output deal. hold the phone -- samsung is moving into cars. and janet yellen hints at an eminent rate hike. chair yellen: such an increase could well become appropriate relatively soon. david: the earnings reports just keep coming from u.s. retailers to japanese banks to european airlines. carolyn: we had a very resilient year. we have had a very good year. david: and the trump transition has the world's attention. big thinkers share their thoughts on what may be coming. bill: it is going to be